The stock market officially entered a bear market last month, defined as a 20% decline from a recent high. Currently, the S&P 500 has dropped by 19.6% since the start of 2022.

That makes this a good opportunity to evaluate growth stocks that may have fallen along with the overall market. You'll want to make sure that the companies still have solid prospects. Fortunately, Costco Wholesale (COST 0.10%) and Apple (AAPL 0.07%) pass muster.

Two people looking at a stock chart on a monitor.

Image source: Getty Images.

Costco

Costco continues to grow revenue and profitability by offering a wide range of products to its members at low unit prices. In its fiscal third quarter ended on May 8, same-store sales (excluding changes in gasoline prices and foreign currency translations) increased by 7.9%.

The big-box retailer's value proposition has garnered a loyal membership, who pay an annual fee. With renewal rates hovering around 90% for years, this indicates that they don't seem to mind paying. Costco also continues to attract new members. It had 64.4 million paid members at the end of the latest fiscal quarter, 6.3% higher than a year ago -- and far higher than the 47.6 million it had at the end of fiscal 2016.

There's also room to expand, with Costco historically opening 20 to 30 new warehouses per year. For the first three quarters of this fiscal year, it opened 14 additional locations, ending the period with 830 warehouses. And it planned to open another 10 in the final three months of this fiscal year.

Loyal customers, attracted by Costco's high-quality goods and services offered at a low price, have led to steadily increasing profits. Despite facing cost pressures like many other retailers, including raising wages for employees, its third-quarter operating profit grew by 7.7% to $1.8 billion.

With the stock price down by about 13% this year, the shares trade at a price-to-earnings (P/E) ratio of 39, down from a 49 multiple in early January.

Apple

Apple sells a range of hugely popular products, such as the iPhone, Mac, iPad, and Apple Watch. It also has a faithful following that has driven top-line increases. Its fiscal second-quarter sales (ended March 26) grew by 8.6% to $97.3 billion.

Its iPhones, accounting for more than half of Apple's sales, continue to see high demand. Second-quarter shipments grew by 8% despite the industry's 11% contraction, allowing Apple's market share to increase from 15% to 18%.

This bodes well for the next version of the phone. While a firm date hasn't been established, based on its past track record, Apple seems poised to release the iPhone 14 in the latter part of this year.

It's not merely releasing popular products without an eye on the bottom line. The company continues to increase profitability. Apple's second-quarter operating income was $30 billion, a 9% increase from a year ago.

Apple's shares have fallen by 18% since the start of 2022. This has caused its P/E multiple to drop to 23 from over 30 during this span.

It's rare for companies with strong prospects to see their stock prices drop. However, that's what has happened with Costco and Apple. This provides a good opportunity to pick up shares in these two growth companies at a discount to where they were selling just a few months ago.